Tuesday, the tobacco company’s Zyn brand announced increasing sales.
Shares of the Connecticut-based corporation rose past $130 at session highs, setting a new intraday record. The stock is also expected to reach an all-time closing high and post its largest one-day increase since March 2020.
Tuesday’s milestone comes after the business reported a dramatic spike in shipments of its Zyn oral nicotine pouches. It is the latest milestone in the stock’s breakout this year, as Wall Street becomes aware of how the product has piqued customer interest.
From 2013 until 2023, the stock witnessed minimal activity, with investors perceiving it as a dividend play in a stagnating sector. Now, traders perceive the company as a growth name, owing in large part to Zyn’s performance after Philip Morris bought the brand in a transaction with Swedish Match two years ago.
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“The No. 1 U.S. smoke-free brand continued to see very strong underlying momentum,” said finance head Emmanuel Babeau on a teleconference with investors Tuesday.
Zyn demand in the United States has predominantly propelled shipments of Philip Morris oral products up over 40% in the first nine months of 2024 when compared to the same time the previous year.
Part of this rise is attributable to reduced supply restrictions for the product. Shipments of Zyn cans in the United States increased by more than 41% in the third quarter compared to the same time in 2023. Philip Morris anticipates Zyn shipments to equal demand “at some point” in the fourth quarter, according to Babeau.
Growth is also occurring overseas, with total nicotine pouch volume outside of America increasing by almost 70% during the third quarters of 2023 and 2024. Zyn is currently accessible in 30 markets, after recent expansions into Greece and the Czech Republic.
Philip Morris also identified Zyn as the primary generator of net revenue for the company as a whole. The firm reported higher financial results than FactSet analysts predicted on both lines for the third quarter, while improving its full-year earnings per share forecast.
Zyn has become a symbol of tobacco firms’ transition towards alternatives to regular cigarettes. Philip Morris said earlier this year that it will spend $600 million to develop a new Zyn manufacturing plant in Colorado.
Philip Morris shares are up more than 37% in 2024. That would be the strongest year on record for the corporation, which was split in 2008 due in part to smoking lawsuits. Philip Morris maintained its worldwide cigarette business, which was steadily booming. Shares of Altria, which owns the U.S. cigarette business, have remained below their all-time high from 2017.
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